LIFESTANCE ALERT: Bragar Eagel – GuruFocus.com
Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed against LifeStance Health Group, Inc. (“LifeStance” or the “Company”). ) (NASDAQ: LFST) in the United States District Court for the Southern District of New York on behalf of all persons and entities who have purchased or otherwise acquired LifeStance securities pursuant to the company’s IPO on June 11, 2021 (the “Class Period”). Investors have until October 11, 2022 to ask the Court to be named lead plaintiff in the lawsuit.
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On or about June 11, 2021, LifeStance completed its IPO, issuing 46 million shares at $18 per share.
On August 11, 2021, LifeStance announced its financial results for the second quarter of 2021, which ended just days after the IPO. The company reported a net loss of $70 million and also disclosed that its operating expenses more than tripled in the second quarter. LifeStance said it experienced a “recent and significant shift in clinician retention levels.”
On this news, the Company’s share price fell $10.16, or 46%, to close at $11.71 per share on August 12, 2021, hurting investors.
Then, on November 8, 2021, LifeStance released its third quarter 2021 financial results, revealing that “[c]retention of linicians [had] stabilized at around 80% annualized in the third quarter” and that the company needed to increase spending on “improving clinician engagement and continued support for workplace and work life flexibility “.
As a result of this news, the company’s stock price fell $3.10, or 24%, to close at $9.73 per share on November 9, 2021, further hurting investors.
Then, on March 10, 2022, LifeStance released its fiscal year 2021 results, indicating that a recent study had shown that three-quarters of mental health patients preferred in-person services and that through 2021, telehealth tended to decline. Additionally, the Company said it will reduce the number of brick-and-mortar facilities it builds in the immediate future in order to increase its profitability.
At the time the lawsuit was filed, LifeStance common stock was trading up to 73% below the IPO price.
The complaint filed in this class action alleges that the defendants made materially false and/or misleading statements, and failed to disclose material adverse facts regarding the company’s business, operations and prospects. Specifically, the defendants failed to disclose to investors: (1) that the number of virtual visits clients undertook using LifeStance declined as COVID-19-related lockdowns were lifted, capping outpatient revenue growth /virtuals of the company; (2) that the percentage of in-person visits customers were undertaking using LifeStance increased as COVID-19 lockdowns were lifted, resulting in a substantial increase in the Company’s operating expenses; (3) that LifeStance had lost a large number of physicians to burnout and, as a result, its physician retention rate had fallen significantly below the 87% evidenced in the registration statement and the company had incurred additional costs to onboard new physicians who were less productive than the outgoing physicians they replaced; and (4) therefore, defendants’ positive statements about the company’s business, operations and prospects were materially misleading and/or lacked reasonable basis at all relevant times.
If you have purchased or otherwise acquired LifeStance stock and suffered a loss, are a long-term shareholder, have information, want to know more about such claims, or have questions about this announcement or your rights or interests in these questions, please contact Brandon Walker or Melissa Fortunato by email at [email protected], call (212) 355-4648, or by filling out+this+contact+form. There is no cost or obligation for you.
About Bragar Eagel & Squire, PC:
Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation before state and federal courts across the country. For more company information, please visit www.bespc.com. Lawyer advertisement. Prior results do not guarantee similar results.
See the source version on businesswire.com: https://www.businesswire.com/news/home/20220811005800/en/